Car Sellers Warn Investors of Possible Financial Hit From Cyberattack

Some of the largest auto dealers in North America are warning of a potential “material” impact to their finances from a cyberattack that has slowed operations at thousands of stores.

Bloomberg
First Published25 Jun 2024, 12:07 AM IST
Car Sellers Warn Investors of Possible Financial Hit From Cyberattack
Car Sellers Warn Investors of Possible Financial Hit From Cyberattack

(Bloomberg) -- Some of the largest auto dealers in North America are warning of a potential “material” impact to their finances from a cyberattack that has slowed operations at thousands of stores.

Sonic Automotive Inc. and Penske Automotive Group Inc. filed disclosures with the US Securities and Exchange Commission on Friday. Group 1 Automotive Inc., AutoNation Inc. and Lithia Motors Inc. followed Monday. All five companies use CDK Global, whose so-called dealership management system was halted a week ago after a crippling hack. 

The disclosures represent the first sign of potential widespread economic impact stemming from the attack against CDK, which serves roughly 15,000 North American car dealerships. The incident is part of a growing phenomenon in which financially motivated cybercriminals have attacked critical links in the global IT supply chain — the plumbers of the Internet that you might least suspect as targets, bringing down entire industries along with them.

Shares in Sonic, Group 1, AutoNation and Lithia have all declined since the hack. Penske shares have risen 2.9% since Wednesday as the company had previously said its dealerships weren’t affected. 

The incident “has had, and is likely to continue to have, a negative impact,” Sonic said in its regulatory filing. The company hasn’t yet determined whether the CDK outage will have a material effect on its finances. Sonic shares have fallen nearly 3% since the hack. 

Here is what other companies are saying about the business impact of the attack: 

The intrusion is the handiwork of a hacking gang known as BlackSuit, Bloomberg reported Monday. The group appears to be comprised of Russian and Eastern European attackers specializing in so-called ransomware-as-a-service attacks, renting out their malicious code in exchange for a cut of any extortion payments. The hackers have demanded tens of millions of dollars in ransom from CDK, which intends on paying. CDK said over the weekend that it expects restoring its systems will take “several days and not weeks.” 

CDK provides software that helps dealers manage customer records, schedule appointments, handle car-repair orders and complete transactions, among other tasks. CDK has yet to restore full service, and the outage has forced dealers to halt or delay some services and resort to pen and paper.  

(Updates share prices and adds reporting on BlackSuit starting in the second-to-last paragraph.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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First Published:25 Jun 2024, 12:07 AM IST
HomeNewsCar Sellers Warn Investors of Possible Financial Hit From Cyberattack

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